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1

CCD Ltd is a firm of independent financial advisers. Financial Conduct Authority rules mean that they do not need to provide advice in some areas and can still call themselves independent. For example, they do NOT need to provide advice on:

Select one:
a. long term care insurance.
b. collective investments.
c. self-invested personal pensions.
d. enterprise investment schemes.

a. long term care insurance.

- chapter reference 8A4A

2

James has a well paid job with his employer but became sick and was off work for 14 weeks. He is expected to be off work for a further 10 weeks. What State benefit[s] would he potentially receive?

Select one:
a. Statutory Sick Pay and Personal Independence Payment.
b. Statutory Sick Pay only.
c. Personal Independence Payment only.
d. Employment and Support Allowance only.

b. Statutory Sick Pay only.

- chapter reference 2D8

3

Sheila, who is age 60, began working at the age of 16 and was employed in various roles for 28 years. During her working life she paid full National Insurance contributions. Sheila has not received any National Insurance credits when not employed. What State retirement benefits would Sheila be entitled to?

Select one:
a. The new State Pension plus an Additional State Pension.
b. A proportionate amount of the Basic State Pension.
c. The full amount of the new State Pension.
d. A proportionate amount of the new State Pension.

b. A proportionate amount of the Basic State Pension.

-chapter reference 2E3A

4

Sanjay provides advice to clients across a wide range of financial planning areas including pension transfers and long term care. In doing so, he has access to a dozen product providers. Sanjay would be best described as a:

Select one:
a. whole of market adviser.
b. restricted adviser.
c. independent adviser.
d. tied adviser.

b. restricted adviser.

-chapter reference 8A4A/8A4B

5

Julie has received investment advice and has been issued with a key investor information document. What will this NOT cover?

Select one:
a. The aims of the investment.
b. The main risks.
c. Julie's commitment to the investment.
d. The impact on Julie's tax position.

d. The impact on Julie's tax position.

-chapter reference 9A2

6

Kate is concerned about how a UK-based pension provider is using her personal data. Who should she report these concerns to?

Select one:
a. The Information Commissioner's Office.
b. The Pensions Regulator.
c. The Financial Conduct Authority.
d. The Competition and Markets Authority.

a. The Information Commissioner's Office.

-chapter reference 4D3

7

Which regulatory body is responsible for providing strategic direction for the entire UK regulatory regime?

Select one:
a. European System of Financial Supervision.
b. Financial Stability Board.
c. Financial Policy Committee.
d. Prudential Regulation Authority.

c. Financial Policy Committee.

-chapter reference 5A

8

A general insurance firm has professional indemnity insurance cover of €500,000 for a single claim. By how much must this cover be increased to satisfy the Insurance Mediation Directive requirements?

Select one:
a. €1,850,000.
b. €1,250,000.
c. €750,000.
d. €1,350,000.

c. €750,000.

-chapter reference 4C3

9

The Consumer Insurance [Disclosure and Representations] Act 2012 states that consumers have a duty to:

Select one:
a. prove they have some financial interest in the life assured.
b. give the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries.
c. take reasonable care not to make a misrepresentation.
d. voluntarily disclose, accurately and fully, all facts material to the risk being proposed.

c. take reasonable care not to make a misrepresentation.

-chapter reference 3C1

10

Highland Independent Financial Advisers are looking to vary their Financial Conduct Authority permission to now include mortgages. This means that they would like to advise their clients on:

Select one:
a. business buy-to-let mortgages.
b. property investments.
c. residential remortgages.
d. mortgages to commercial clients.

c. residential remortgages.

- IncorrectIncorrect, chapter reference 6C3A

11

Peggy is aged 72 and is struggling to make ends meet. To make things worse, she has just had a heart attack and will need care for the remainder of her life. What State benefits is she most likely to be eligible for if she claims them?

Select one:
a. State Pension Credit and Personal Independence Payment.
b. Personal Independence Payment only.
c. Attendance Allowance only.
d. State Pension Credit and Attendance Allowance

d. State Pension Credit and Attendance Allowance.

-chapter reference 2D8/2D9

12

A product provider must report persistency figures to the Financial Conduct Authority each year. For new business, this information must be provided for the first:

a. three years
b. five years.
c. two years.
d. four years.

d. four years.

13

The Senior Managers and Certification Regime aims to strengthen market integrity by:

a. increasing the number of people that have to be directly approved by the Financial Conduct Authority.
b. enabling the Financial Conduct Authority to monitor the number of people acting in each controlled function.
c. making firms more accountable for their actions.
d. making individuals more accountable for their conduct and competence.

d. making individuals more accountable for their conduct and competence.

14

A firm of advisers has a clear vision which supports the fair treatment of customers. This is reflected by their change management programmes and outsource arrangements. Which 'key cultural driver' is the firm positively displaying?

Select one:
a. Decision making.
b. Controls.
c. Leadership.
d. Strategy.

d. Strategy.

15

Sue recently died intestate leaving an estate of £600,000. Sue has no children, no living parents but she does have a brother. Sue's husband, Steve, therefore received 100% of Sue's personal chattels plus assets of:

Select one:
a. £600,000 absolutely.
b. £270,000 plus one half of the residue absolutely.
c. £270,000 absolutely plus a life interest in one half of the residue.
d. £300,000 absolutely.

a. £600,000 absolutely.

16

What action should a tied agent take if, when advising a client, they are unable to provide a suitable product from the firm’s product range?

Select one:
a. Refer the client to the agent's colleague who has more experience.
b. Recommend a product that they know to be widely recommended by other firms.
c. They must not make a recommendation.
d. Recommend a product they can advise on which is most suitable for the clien

c. They must not make a recommendation.

17

When will Fatima, who was born in April 1962, reach State pension age?

Select one:
a. 2026.
b. 2028.
c. 2029.
d. 2027.

c. 2029.

18

What type of supervisory approach allows the Prudential Regulatory Authority to make judgements about what might happen in the future?

Select one:
a. Systematic supervision.
b. Prudential supervision.
c. Reactive supervision.
d. Outcomes-based supervision.

d. Outcomes-based supervision.

19

Which action would NOT comply with Principle 1 of the Financial Conduct Authority’s Code of Conduct [COCON] about acting with integrity?

Select one:
a. Failing to supervise and monitor adequately an individual.
b. Failing to provide adequate control over a client's assets.
c. Deliberately avoiding an interview or refusing to answer questions put by a regulator, despite a request or demand having been made.
d. Deliberately designing transactions so as to disguise breaches of requirements and standards of the regulatory system.

d. Deliberately designing transactions so as to disguise breaches of requirements and standards of the regulatory system.

20

Indications that a firm is demonstrating adherence to Financial Conduct Authority guidance on the fair treatment of customers [FTC] and maintaining high standards in this regard might include all of these actions APART from:

Select one:
a. making the implementation of FTC visions and values the responsibility of middle management.
b. making it clear to all staff that behaviour that acted against clients’ interests will not be tolerated.
c. providing the facility for staff to give anonymous feedback to senior management regarding perceived failures in delivering FTC.
d. providing booklets to all staff along with posters displayed throughout the organisation.

a. making the implementation of FTC visions and values the responsibility of middle management.

21

The Financial Conduct Authority is looking for evidence that Bright Star Insurance Ltd have delivered the six fair treatment of customers outcomes. Bright Star’s evidence is LEAST likely to include:

Select one:
a. management information relating to product mix.
b. senior management assessments of call centre traffic.
c. their past 12 months' business results.
d. customer satisfaction results.

c. their past 12 months' business results.

22

Mary died in January 2008, when the Inheritance Tax nil rate band was £300,000. She left a total of £60,000 to her two children and the balance of her estate was left to her husband, Albert. He died in May 2021. Assuming that they did not own any residential property, and that no other gifts or reliefs apply, the nil rate band that will be applied to Albert's estate is:

Select one:
a. £590,000.
b. £585,000.
c. £325,000.
d. £485,000

b. £585,000.

23

Sarah, who is 30, requires a term assurance policy with an initial sum assured of £100,000. The policy that would have the lowest premium is a:

Select one:
a. decreasing term assurance policy with a term of 25 years.
b. level term assurance policy with a term of 25 years.
c. decreasing term assurance policy with a term of 10 years.
d. level term assurance policy with a term of 10 years.

c. decreasing term assurance policy with a term of 10 years.

24

Mr & Mrs Brown have a number of financial needs but cannot afford to satisfy them all. They ask you to advise them. What should you do?

Select one:
a. Ensure that their life assurance needs are satisfied and then recommend solutions to satisfy their other needs to the extent they can afford.
b. Ensure adequate protection of income is established before recommending solutions to satisfy any other needs.
c. Prioritise their needs against criteria laid down by the Financial Conduct Authority and present them with recommendations in order of priority.
d. Prioritise their needs in consultation with them and recommend solutions to satisfy those needs in order of priority

d. Prioritise their needs in consultation with them and recommend solutions to satisfy those needs in order of priority

25

Beth has bought her car insurance via the internet on a non-advised basis. Juan has also bought motor insurance but in his case, this was provided on an advised basis via an insurance broker. How will the process differ, if at all, between Beth and Juan?

Select one:
a. Only Juan will be asked about his circumstances to establish suitability.
b. They will be treated equally so there is no difference.
c. Only Juan will receive a demands and needs statement that sets out why the product is suitable.
d. Only Beth will receive an initial disclosure document or Terms of Business letter.

c. Only Juan will receive a demands and needs statement that sets out why the product is suitable.

26

The Bank of England is responsible for ensuring financial security in the UK. To achieve this, it is most likely to:

Select one:
a. maintain stable prices by capping increases.
b. use surveillance and market intelligence to detect and reduce threats.
c. create confidence in Sterling.
d. refer to the Financial Policy Committee to manage interest rates.

b. use surveillance and market intelligence to detect and reduce threats.

27

An insurance broker must obtain details of a client’s circumstances and needs, including existing policies, and give the client a statement of those needs together with reasons for any recommendations. This is known as a:

Select one:
a. reason why letter.
b. summary statement.
c. demands and needs statement.
d. suitability letter.

c. demands and needs statement.

28

Lewis is the client of Tom, an independent financial adviser. In what document would Lewis be able to establish how often Tom should review his circumstances?

Select one:
a. Tom's website.
b. The suitability report issued by Tom when the last recommendation was made.
c. There is no document that will advise Lewis of this, he will have to wait for Tom to contact him, or he will have to contact Tom.
d. The client agreement.

d. The client agreement.

29

Payment systems are important to the financial sector either because they deal with very high values or because they are widely used by customers. Which body regulates UK payment systems?

Select one:
a. The Payments Systems Regulator.
b. The Association of Payment Clearing Services.
c. The Payments Council.
d. Payments UK.

a. The Payments Systems Regulator.

30

Anna is a paraplanner in a firm of investment advisers. Which activity could she carry out which would NOT be covered under the Financial Conduct Authority’s financial promotions rules?

Select one:
a. Drafting an advert promoting products offered by her firm for use in a magazine.
b. Sending out seminar invitations from a database of potential new clients.
c. Sending out a letter to an existing individual client.
d. Ringing a database of potential new clients who have not previously given consent for this

c. Sending out a letter to an existing individual client.